The historic India-UK trade deal signed | Explained by Ankit Agrawal Study IQ

Summary

The video discusses the historic free trade agreement between India and the UK, marking a strategic and economic breakthrough after three years of negotiations. The agreement covers goods, services, investments, mobility, intellectual property, and sustainability, benefiting both nations. It includes tariff reductions, easier market access, and professional mobility, particularly for Indian professionals in the UK. Additionally, it introduces a unique 'Double Contribution Convention,' enhancing economic cooperation and innovation. The agreement aims to foster trade diversification, economic growth, and job creation, with positive impacts expected for various sectors like pharma, IT, and textiles in India.

Takeaways

• 😀 India and the United Kingdom have signed a landmark free trade agreement (FTA) after 3 years of negotiations.
• 😀 The FTA is comprehensive, covering goods, services, investment, mobility, intellectual property, and sustainability.
• 😀 The trade deal is expected to increase the bilateral trade between India and the UK from £41 billion to £66 billion by 2040.
• 😀 The UK needed this trade deal post-Brexit to strengthen its global trade ties outside of the European Union.
• 😀 India seeks to diversify trade dependency away from China and benefit from better access to the UK market.
• 😀 The deal reduces tariffs on UK products like whisky, scotch, and gin, making them cheaper for Indian consumers.
• 😀 India benefits from better access to the UK market for products like apparel, textiles, spices, basmati rice, and more.
• 😀 The agreement includes provisions for easier mobility of professionals, especially in sectors like IT, finance, and legal services.
• 😀 The deal introduces the 'Double Contribution Convention,' an innovative system recognizing mutual economic contributions of businesses and investments in both countries.
• 😀 India and the UK aim to create India-UK startup corridors in cities like London-Pune and Manchester-Hyderabad to foster innovation and business exchange.

Q & A

What recent trade agreement was signed between India and the UK?

India and the UK signed a comprehensive Free Trade Agreement (FTA), marking a significant milestone after three years of negotiations. The agreement covers various sectors, including goods, services, investments, and intellectual property.

How much is the trade between India and the UK expected to grow by 2040?

The trade between India and the UK, which was worth around £41 billion last year, is projected to grow to £66 billion by 2040, amounting to an overall trade of about ₹6 lakh crore (6 trillion INR).

What is the significance of the Free Trade Agreement between India and the UK?

The Free Trade Agreement is important as it allows both nations to expand trade, diversify their markets, and strengthen economic ties. It helps reduce tariffs on various goods and enhances mobility for professionals between the two countries.

What are some of the key benefits for the UK from this trade agreement?

The UK benefits from reduced tariffs on its goods such as whisky, scotch, and gin, which will become more affordable in India. Additionally, it gains better access to India's growing market, especially in sectors like pharmaceuticals and engineering.

How will the Free Trade Agreement affect Indian exporters?

Indian exporters will benefit from better market access in the UK, with reduced tariffs on goods like apparel, leather, food products, textiles, rice, spices, and jewelry. Small and medium-sized businesses in India will especially benefit from this expanded access.

What is the 'Double Country Contribution Convention' mentioned by PM Modi?

The 'Double Country Contribution Convention' is an innovative agreement between India and the UK that recognizes and incentivizes businesses contributing to both economies. It encourages joint ventures, investments, and innovation across both countries.

How does the 'Double Country Contribution Convention' benefit businesses?

Businesses investing in each other's countries will receive formal recognition for contributing to job creation, research, and development. For example, Indian startups investing in the UK's innovation hubs can receive grants, and similarly, UK companies investing in India will also be recognized.

What are the advantages for Indian professionals in the UK due to this agreement?

The agreement allows Indian professionals, especially in sectors like IT, finance, and legal services, to gain easier access to work in the UK. It also includes provisions for extending visa programs for young professionals and reducing pension contribution requirements.

What sectors in India are expected to benefit the most from this Free Trade Agreement?

India's sectors such as pharmaceuticals, textiles, IT, food products, and small-medium enterprises (SMEs) are expected to benefit the most. The deal also facilitates better access for Indian startups in the UK's innovation and startup ecosystems.

What challenges were faced during the negotiations for the Free Trade Agreement?

Key challenges included issues related to agriculture, dairy, and poultry markets, as India wanted to protect these sectors. Additionally, discussions on patent rules, data privacy, and environmental standards were contentious, but compromises were made to address these concerns.